What is a Sales Pipeline? 7 Stages & Why You Must Track It

Are you rushing late to your MBA class? Need to impress your peers on “Sales Pipeline”? 😛

TLDR: Think of the Sales Pipeline as your sales GPS. It’s the ultimate visual tool to track prospects through 7 quantifiable sales pipeline stages, from prospecting to closing. This way, you and your team can easily see how close someone is to making a purchase.

Your sales pipeline highlights buying intent, providing your team and leadership with real-time insights into the prospect’s journey, ensuring precise sales tracking and informed decision-making.

In this guide, you’ll learn:

– The complete sales pipeline definition and why it matters

– The 7 critical sales pipeline stages (with real examples)

– Why tracking your pipeline is non-negotiable for B2B teams

– Key insights your sales pipeline should reveal

– Best practices to optimize pipeline performance

If you feel that’s a lot of jargon, read on where we break down these terms and explain them in detail.

What is a Sales Pipeline?

You already have a Sales Pipeline but may not even know it.

We want to table this problem from the first principles, but first, some commonly used terms in Sales

Prospecting is the first step in the sales process: identifying potential customer prospects. The goal of prospecting is to develop a database of likely customers and then systematically communicate with them in the hopes of converting them from potential customers to current customers. 

Let’s say there is just a two-member team in charge of selling.

Hypothesis: A 2-member team can manage their selling just using an Excel sheet and no formal tooling

How many people can a decent rep contact in one day? 40, 60? From “Inbound Selling” by Brian Signorelli – Chapter 4 “Connect: How to engage Active – and not so Active Buyers”

Most reps were cranking out over a hundred attempts daily; the best well into the 120s and 130s

Let’s say your 2 member team is decent – so each is contacting 100 prospects a day.

100 x 22 (working days) = about 2200 prospect touch events a month x 2 (reps) = 4400 touch points per month.

Sales touchpoints are the moments when a prospect encounters your brand, whether it’s by email, phone call, LinkedIn, demo, or some other type of outreach. Touchpoints can occur during any stage of the buyer journey: awareness, consideration, and decision. 

Why is it essential for you to track your sales pipeline?

First, let’s understand what goes on when you prospect.

1. Gather information and qualify

2. Build familiarity

3. Set an appointment for a meeting to move a prospect closer to a sale OR close a sale.

This means, in a month, each of those 2200 x 2 ( reps ) = 4400  touch points need to be marked in the system – as “not ready for sales right now”, “interested”, or “going to make a purchase right now”.

Furthermore, your team must fill that list with more qualified leads for the next month.

Now imagine if your team size is 10 – that’s 10 x 2200 = 22000 touch points being created monthly, giving you insights on what’s happening with every prospect you are working with.

But things will slip through the cracks if you don’t have a formal system tracking your sales pipeline. A team member will go on leave.

Follow ups may be missed. A fellow team member will handle a call on behalf of someone else. But the context was missed. The customer specifically mentioned clarification on CSV uploads, and that context was not passed on. And the follow up call was shabby. Or a lead said: call me after a week.

And it was noted down in the Excel sheet. But Excel sheets don’t remind you to call up a lead after a week. And so, a  warm prospect will go with a competitor, and your team will lose a deal for reasons well within your control.

Here’s another scenario. Your team members don’t fill in the updates into your Excel sheet with as much zeal as you expect them to. Call notes are not put into the column that was designated for the notes. This means a lack of visibility on what’s happening in the field.

So I hope by now the need for a formal sales engagement system to track your prospects’ journey is evident.

Prospects go through a continuous identification process, from qualifying to closing the sale and many intermediate business-dependent steps in between. This is the Sales Pipeline; we will get a more formal description.

Sales pipeline stages: The 7-step breakdown

Every prospect in your sales pipeline moves through quantifiable stages on their journey from initial contact to closed deal. 

Understanding these sales pipeline stages helps you forecast revenue accurately, identify where deals get stuck, and optimize your sales process for maximum efficiency.

Quick Reference: Sales Pipeline Stages at a Glance

Stage	Key Actions	Average Duration	Success Signals
1. Prospecting	Research, outreach, lead generation	Ongoing	Response rate >5%
2. Qualification	BANT questions, lead scoring	1-3 days	Confirmed budget + need + timeline
3. Meeting/ Discovery	Needs analysis, pain point identification	30-60 minutes	Discovery call completed
4. Demo	Product walkthrough, use case demo	30-60 minutes	Demo completed, trial started
5. Proposal	Pricing presentation, formal proposal	3-7 days	Proposal reviewed by decision-maker
6. Negotiation	Objection handling, terms adjustment	5-14 days	Terms agreed upon
7. Closing	Contract signing, payment processing	1-7 days	Deal closed, payment received

Here’s a breakdown of the 7 critical sales pipeline stages every B2B sales team should track:

Stage 1: Prospecting | Finding potential customers

Prospecting is the first stage of the sales pipeline where you identify and reach out to potential customers who fit your ideal customer profile. This involves generating leads through cold outreach, marketing campaigns, referrals, or inbound inquiries.

In action: Your SDR, Amy, spends her morning prospecting time block making cold calls, sending cold emails, and connecting with prospects on LinkedIn. She’s looking for companies that match your target profile, mid-sized B2B SaaS companies with 50-200 employees.

Key activities: Research target accounts, build prospect lists, initial outreach (cold calls, cold emails, social selling), lead generation

Success metric: Response rate of 5-10% on outreach

SAAS Tip: Use sales engagement platforms like SmartReach.io to automate multi-channel prospecting sequences while maintaining personalization at scale.

—

Stage 2: Lead qualification | Separating buyers from browsers

Qualification is where you determine if a prospect has the budget, authority, need, and timeline (BANT) to become a viable customer. Not every prospect who responds is qualified; this stage separates serious buyers from tire-kickers.

In action: Amy gets on the phone with John, an MQL who downloaded your cold email white paper. She asks qualifying questions: “Are you currently using a cold email solution? What’s your team size? What’s your budget range? Are you the decision-maker, or who else is involved? When are you looking to implement?”

Based on John’s answers, Amy scores the lead in your sales engagement system. John confirms he has a budget of $5,000/year, he’s the director of sales (decision-maker), his team of 8 SDRs needs a solution, and they want to start within 60 days. This is a qualified lead.

Key activities: BANT questioning, lead scoring, identifying decision-makers, setting discovery calls

Success metric: 30-40% of prospects qualify as serious opportunities

SAAS Tip: Create a standardized qualification rubric so every rep asks the same questions and scores leads consistently.

—

Stage 3: Meeting/Discovery call | Understanding needs

In this stage, you conduct an exploratory call or meeting to deeply understand the prospect’s pain points, current solutions, goals, and desired outcomes. This is where you gather intelligence to tailor your pitch.

In action: Amy schedules a 30-minute discovery call with John. She asks about his current cold email challenges, what solutions he’s tried before, what features are must-haves versus nice-to-haves, and what success looks like for his team. 

She learns that John’s biggest pain point is low deliverability rates and manual follow-up processes eating up his SDRs’ time.

Key activities: Needs analysis, pain point identification, competitor research, building rapport, setting expectations

Success metric: 60-70% of qualified leads complete a discovery call

SAAS Tip: Record discovery calls (with permission) and share notes in your CRM so the entire team understands the prospect’s context.

—

Stage 4: Demo/presentation | Showcasing your solution

The demo stage is where you present your product or service, demonstrating how it solves the prospect’s specific problems. This isn’t a generic feature dump, it’s a customized walkthrough based on discovery insights.

In action: Amy brings in a solutions engineer for a 45-minute product demo with John’s team. They showcase SmartReach’s automated email sequences, deliverability optimization features, and multi-channel outreach capabilities, directly addressing John’s pain points around deliverability and manual work. John asks detailed questions about CRM integration and reporting.

Key activities: Product demonstration, feature walkthroughs, use case examples, handling technical questions, trial setup

Success metric: 50-60% of demos lead to trial signups or proposal requests

SAAS Tip: After the demo, immediately schedule a follow-up call for one week later to check on trial progress and answer questions.

—

Stage 5: Proposal | Formalizing the offer

In the proposal stage, you present formal pricing, package options, contract terms, and implementation timelines. This makes your offering concrete and moves the conversation toward commitment.

In action: Amy sends John a customized proposal with three pricing tiers based on his team size and sending volume. She includes a breakdown of features in each tier, onboarding timeline, support options, and ROI projections showing how SmartReach will save his team 15 hours per week.

Key activities: Pricing presentation, proposal creation, ROI calculations, contract drafting, answering budget questions

Success metric: 40-50% of proposals move to negotiation

SAAS Tip: Include customer testimonials and case studies in your proposal that match the prospect’s industry and use case.

—

Stage 6: Negotiation | Addressing objections

Negotiation is where prospects raise concerns about pricing, features, contract terms, or implementation. Your job is to address objections, offer compromises where appropriate, and move toward mutual agreement.

In action: John comes back with concerns: the pricing is slightly above budget, and he needs a specific integration with their CRM that’s not currently available. Amy negotiates a 10% discount for an annual contract (instead of monthly) and confirms with the product team that the CRM integration will be available within 60 days. John agrees to move forward.

Key activities: Objection handling, pricing negotiations, contract modifications, stakeholder alignment, legal review

Success metric: 60-70% of negotiations result in agreement

SAAS Tip: Keep a database of common objections and proven responses so your team handles pushback consistently and effectively.

—

Stage 7: Closing | Winning the deal

The closing stage is where contracts are signed, payment is processed, and the prospect officially becomes a customer. This is the finish line of your sales pipeline, but not the end of the customer relationship.

In action: John reviews the revised contract, gets final approval from his CFO, signs the agreement electronically, and processes payment. Amy hands off John’s account to the Customer Success team with detailed notes on his goals, pain points, and promised timeline for the CRM integration.

Key activities: Contract signing, payment processing, onboarding kickoff, customer success handoff

Success metric: 80-90% of agreed deals close successfully (some fall through at the last minute)

SAAS Tip: Celebrate wins with your team, but immediately transition the customer to onboarding to maintain momentum and prevent buyer’s remorse.

Average B2B SAAS Sales Cycle: 30-90 days from prospecting to closing, depending on deal size and complexity.

Sales pipeline stages in action: A real-world example

Now that you understand the 7 sales pipeline stages, let’s see how they work in practice. Here’s a day in the life of an SDR moving prospects through each stage, showing the actual conversations, decisions, and system updates that happen at every step.

Follow along as Amy, an SDR at a SAAS company, works through her pipeline:

Stage:  Prospecting – Finding new potential customers. If there is a Marketing team, they will be generating inbound leads. Otherwise, your SDRs will be cold prospecting, which means cold calling or sending out cold emails, or finding the right people on LinkedIn who fit your profile.

In an inbound sales call center, the process differs slightly, SDRs primarily focus on handling incoming inquiries, ensuring high-intent prospects are quickly qualified and moved through the sales pipeline.

Stage: Qualifying –  People who responded to your cold email and said they are interested are your warm leads. The people on LinkedIn who accepted your connection request are 1 more step away from qualification. You need to send them another message to make your proposition offer.

And what about those where you have a phone number? Your team will pick up the phone, read out your script, and ask them for an appointment if they are interested in this.

Your SDR, Amy, is in her prospecting time block. She dials an MQL –  “Hi John. This is Amy from SmartReach. We noticed you downloaded our white paper on cold email outreach to put your sales outreach on autopilot. Are you currently looking for a cold email solution? Can I schedule a 15-minute call to speak with you on this?”

If John answers yes, this is a qualified lead. Amy gets into the sales engagement system and sets an appointment for 15 minutes. Amy continues dialing through the prospects list. Marking them as either interested with an appointment in the system or cold lead. She may update notes on cold leads – like call back in 2 months. 

Either way, she has made a touch point entry in the system for each of these contact channels and marked the prospect as someone they need to continue further with, or this is not the right time for the product you are selling. 

Note: Amy could manually enter these touchpoint entries or could be auto-detected and tagged based on the sales engagement system you are using. 

Her qualification calling block is now over. 

Sales mode: And now she switches gears, there is hope, money to be made and that quarterly bonus to be collected.

She has a set of appointments to attend. She gets on a call with John. 

“Hey John, thank you for taking the time for this exploratory call.” 

Fitment evaluation: 

Have you used any cold emailing solutions before?

Are you planning on using this solution in-house, or are you an agency?

Budget quantification: 

How big is your team? How many seats are you looking to buy? OR what’s your sending volume?

Competition: 

Are you evaluating any other products?

Lead to a product demo: 

Would you like to set up a product demo?

Amy gets into the system and scores this lead based on the questions she asked and their answers. These are time-tested questions that have evolved over time in your sales process.  Every rep is supposed to ask these and qualify the prospect.

Stage: Demo setup

Demo appointment: Hi John. Thank you for joining us for this demo. I have today with me who will be demoing our product to you.

I hope we have answered your questions, would you be interested in starting a trial? I would like to schedule another call with you a week from now to check on how things are going. But feel free to reach out to us at any time 

Stage: Trial Follow-up

Hi John. It’s been about a week into your trial. I wanted to understand how things are going with the product. Is there anything I or our Customer support team can help you with?

….

Sure, we can clear your doubts here and now on this call and I can set up another meeting if our time here is not enough to clear your doubts. 

. . . 

I would like to set up another call next week to ensure you’re not facing any roadblocks, and we can meet again to discuss the fitment to your use case.

Stage: Pitch the sale. Score 90.

As you can see, the software tracks each phase of the touch point, and your Prospect’s status is carefully guided toward success or failure. Tracking the prospect’s journey to the final sale.

This is the Sales Pipeline. Detailed tracking of every touchpoint in the sales process and marking off critical stages that indicate that a prospect has moved to the next stage in a quantified manner, surfacing intent to the leadership tracking their sales progress.

Based on the above, you would have gauged that the sales pipeline stages could vary from business to business. You could define the stages based on your sales playbook.

Post-sales mode: If a sale is closed, the customer may be handed over to a Customer Success team, and this may be the last step in the pipeline

As we mentioned in the short introduction, a Sales Pipeline is a detailed tracking of every touchpoint in the sales process and marking off critical stages that indicate that a prospect has moved to the next stage in a quantified manner, surfacing buying intent to the team and leadership tracking their sales progress.

What insights should a Sales Pipeline give?

1. Do we have a large enough list of prospects? Here are a couple of lines from “Inbound Selling” Chapter 4, pages 63 and 64. 
   
   “At Hubspot we are spoiled. Especially in 2012 we were very spoiled. I asked for leads and the marketing Gods just provided. There were literally tens of thousands of leads for us to call because our marketing team relentlessly created high-quality content to attract visitors to our site and convert them into leads.” 
   
   So if your team is not having a large sales pipeline, you need to take a closer look at the Marketing team or ramp up cold prospecting done by your SDRs.
2. Do we have a large enough list of qualified prospects? If your pipeline of qualified prospects is not high enough, it means your SDRs are not making enough sales calls using the Marketing Qualified Leads pipeline to further gather prospect interest about their current buying cycle.
3. What is the maximum quantifiable total sale my SDR can do this month? (can he meet his target?) If you add up this number across all SDRs, will you meet your target? When a company sets up an incentive program for their SDR team, they want them to hit those targets and drive company growth. But if those targets were pulled out of thin air with vanity numbers, then they will not be able to hit those targets and will be demoralized.
4. What are the largest deal sizes
5. Are the deals scored with a high enough probability? You want your team to work on the highest value; highest probability leads to maximize conversion. Over time your team has figured out key questions that need to be asked at each stage of selling, a lead scoring formula that adds up scores and qualifies leads. Based on this you want your team working on the highest probable conversions. And if there is a tie on scores, you want them working on a lead valued at USD 1000 instead of USD 200.
6. What are my SDRs closing ratios?. Amy from your team may need to consume 8 leads before she closes a deal. Bob may need 10.
7. Are my SDRs filling up the CRM and touch point notes? You want a clear picture of what’s happening on the ground.
   1. Prospect didn’t buy because of feature X
   2. Prospect didn’t buy since we don’t have compliance Y
   3. Prospect didn’t have budget
   4. At the Lead qualification stage they told us we need to contact them in September
8. Is the system warning me of upcoming doom – lack of pipeline, lack of qualified leads for a 10-member team am I seeing 22000 touch point activities being logged in the system?
9. Is the system reminding us of all those prospects my SDR marked as contact me in September –  “Our contract is ending in November so we are going to look for something new then?”

What more can a Sales Pipeline tell you?

Let’s think a bit more. The quarter has ended. You and your team are looking back. There are deals your team won and that makes you happy. But there are deals you lose, too.

Maybe you lost 10 deals to a missing compliance. 

Another 8 deals to a missing feature.

And in another 5 conversations, you heard of a new competitor offering something that requires a change in your pricing strategy. 

You have all these insights because you ensured that your team filled out all those reasons diligently and now you can look at things in aggregate via reports.

And so you hold a meeting with the product team and give them detailed insights as to what’s working in the market and some trends that you’re seeing, new directions that need to be taken, and pricing changes that need to be made.

What else do you want your sales pipeline to tell you?

Let’s say your company uses a CRM. And one fine day it goes down for a few hours. And your sales team is sitting idle. You reach out to their support and you want reasons why it went down.

And you find out their database CPU hit 90% and then they crashed. And after that, their team realized specific tables were not optimized (missing indexes). And by the time they cleaned everything up, it was a few hours.

And then you ask them, and yourself, why were no alarms set for such things? 

What about your Sales Pipeline? What kind of alarms do you want set?

1. Marketing qualified leads are too low
2. Sales qualified prospects are too low
3. Quantified deal size is too small 
4. One particular SDR is not filling their touchpoints frequently enough or after too much time has passed, losing context a customer has passed to them. Your CRM is now rotting.
5. SDRs with below-average contribution to the top of the funnel
6. One particular SDR’s closing ratio is way too low.

In summary, a correctly done Sales Pipeline can help optimize your SDR’s time and sales efficiency and surface the true picture of what’s happening in the field, allowing you to operate as a General, marshaling your troops where needed, yet allowing them autonomy to operate on the highest value deals like Commandos.

Key takeaways: Sales pipeline stages

• A sales pipeline tracks prospects through 7 quantifiable stages from prospecting to closing

• Each stage requires specific actions, clear entry/exit criteria, and measurable success metrics

• Tracking your pipeline prevents deals from slipping through cracks and enables accurate revenue forecasting

• Pipeline visibility helps identify bottlenecks, optimize SDR performance, and improve conversion rates

• Automated sales engagement software like SmartReach.io ensure consistent follow-up across all pipeline stages

• Regular pipeline audits surface market trends, missing product features, competitive threats, and customer objections

• Good B2B SAAS conversion rates: 30-40% (prospecting to qualification), 5-15% (end-to-end close rate)

FAQ on Sales pipeline stages

Q: What is a sales pipeline?

A sales pipeline is a visual representation of your sales process, showing every stage a lead goes through before becoming a customer. It helps sales teams track prospects, measure progress, and forecast revenue based on deal movement through the pipeline stages.

Q: How do you build a sales pipeline?

To build a sales pipeline, define your sales stages, identify your target audience, generate and qualify leads, assign deal values, and track progress through CRM software. Regularly review and optimize your pipeline to ensure it reflects your actual sales process and goals.

Q: What is the difference between sales pipeline and sales funnel?

A sales pipeline tracks the steps sales reps take to close deals, while a sales funnel shows how many leads move through each stage of the buying process. The pipeline focuses on the seller’s actions; the funnel focuses on the buyer’s journey.

Q: How do you track a sales pipeline?

You can track a sales pipeline using CRM tools that monitor deal stages, sales activities, and conversion rates. Tracking helps identify bottlenecks, measure team performance, and forecast revenue accurately. Regular updates ensure your pipeline reflects real-time deal progress.

Q: What is a good sales pipeline conversion rate?

A good sales pipeline conversion rate typically ranges from 20% to 30%, depending on the industry and sales cycle length. Monitoring this rate helps measure how efficiently leads are converted into customers and highlights where improvements are needed in your sales process.

Q: What is pipeline velocity?

Pipeline velocity measures how quickly deals move through your sales pipeline to generate revenue. It’s calculated by multiplying the number of deals, average deal size, and win rate, then dividing by the sales cycle length. A higher velocity indicates faster revenue growth.

Q: What are the stages of a sales pipeline? 

The typical sales pipeline has 7 stages: (1) Prospecting – identifying potential customers, (2) Qualification – verifying fit and budget, (3) Meeting/Discovery – understanding needs, (4) Demo/Presentation – showcasing your solution, (5) Proposal – presenting pricing and terms, (6) Negotiation – addressing objections, (7) Closing – finalizing the deal.